DOL May Step Up Audits of Staffing Firms

Article by Stephen Dwyer, Deputy General Counsel, American Staffing Association

sdwyer@americanstaffing.net

The U.S. Department of Labor's Wage and Hour Division has begun an outreach effort to staffing firms. DOL is sending letters reminding firms of their overtime obligations under the Fair Labor Standards Act and indicating that the DOL may audit the firms' compliance in the near future.

Receipt of a letter does not necessarily mean that the staffing firm will be investigated by DOL. Nevertheless, since DOL has indicated that it will step up enforcement efforts, all staffing firms—both those that receive letters and those that do not—should review their compliance with federal wage and hour laws now.

Here are some tips to keep in mind:

• Staffing firms are obligated to pay nonexempt employees time and one-half for every hour worked over 40 in a workweek.
• A staffing firm and its client generally will be jointly responsible for overtime pay if the employee works over 40 hours for that client. If the work is split among more than one client and the employee does not work for more than 40 hours for any one client, the staffing firm alone will be responsible for the overtime pay.
• With the exception of certain computer professionals earning in excess of $27.63 per hour—and doctors, teachers, outside sales personnel, and lawyers—employees paid on an hourly basis generally are not exempt from federal overtime pay requirements.
• Executive, administrative, and professional employees are eligible for exemptions from overtime only if they perform the requisite duties associated with the exemption and they are paid on a salary basis.
• Travel to a job site at the beginning of a workday generally is not compensable, but travel from job site to job site during the workday generally will be compensable.

Remember to check state wage and hour laws too, as they often provide workers with greater protections than FLSA does.

For specific guidance, see the 11th edition of the ASA book Employment Law for Staffing Professionals. A full chapter of the book is devoted to the particular wage and hour issues that staffing firms face. Don't get caught in the next DOL sweep—protect your firm and your clients from potential liability by ordering your copy today. Visit americanstaffing.net.